Word: polaroiding
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...then, Polaroid's shares were virtually worthless, having plummeted from $60 in 1997 to less than the price of a Coke in October 2001. During that period, employees were forbidden to unload their stock, based on laws approved by Congress. But what employees weren't allowed to do at a higher price, the company-appointed trustee could do at the lowest possible price--without even seeking the workers' permission. Rather than wait for a possible return to profitability through restructuring, the trustee decided that it was "in the best interests" of the employees to sell the ESOP shares. They went...
Moss was one of the losers. Now 60, she spent 35 years at Polaroid, beginning as a file clerk out of high school, then working her way through college at night and eventually rising to be senior regional operations manager in Atlanta. "It was the kind of place people dream of working at," she said. "I can honestly say I never dreaded going to work. It was just the sort of place where good things were always happening." One of those good things was supposed to be the ESOP, touted by the company as a plan that "forced employees...
...Once Polaroid entered bankruptcy, Moss and her retired co-workers learned a bitter lesson--that they had no say in the security of benefits they had worked all their lives to accumulate. While the federal Pension Benefit Guaranty Corp. (PBGC) agreed to make good on most of their basic pensions, the rest of their benefits--notably the ESOP accounts, along with retirement health care and severance packages--were canceled. The retirees, generally well educated and financially savvy, organized to try to win back some of what they had lost by petitioning bankruptcy court, which would decide how to divide...
...bankruptcy judge ruled in favor of the company. In 2002 Polaroid was sold to One Equity Partners, an investment firm with a special interest in financially distressed businesses. (One Equity was a unit of Bank One Corp., now part of JPMorgan Chase.) Many retirees believed the purchase price of $255 million was only a fraction of the old Polaroid's value. Evidence supporting that view: the new owners financed their purchase, in part, with $138 million of Polaroid's own cash...
...bankruptcy court empty-handed. They all got something in the mail. Moss will never forget the day hers arrived. "I got a check for $47," she recalled. She had lost tens of thousands of dollars in ESOP contributions, health benefits and severance payments. Now she and the rest of Polaroid's other 6,000 retirees were being compensated with $47 checks. "You should have heard the jokes," she said. "How about we all meet at McDonald's and spend...